U.S. stocks were little changed on Thursday as rising oil prices cooled investors' enthusiasm for shares despite strong sales posted by retailers in September, acccording to Reuters. The rise in crude reversed a sharp drop in prices since July that had fueled a stocks rally and ultimately pushed the Dow industrials to a fresh record earlier this week. The dollar gained against the euro when there was no clear signal from the European Central Bank on interest-rate hikes in 2007 even as the ECB raises rates by 25 basis points as expected to 3.25 percent and hinted at a hike in December. Treasury bond prices slipped on expectations the U.S. jobs market may be more robust than previously thought. "A little bounceback in oil prices today has damped the enthusiasm," said John Caldwell, chief investment strategist at McDonald Financial Group in Cleveland, Ohio, adding that "the fact you had oil drop from the $70s to below $60 was coincident with the stock market taking off." The Dow Jones industrial average was down 17.77 points, or 0.15 percent, at 11,832.68, a day after hitting a record closing high and a record intraday high. The Standard & Poor's 500 Index was down 1.46 points, or 0.11 percent, at 1,348.78. But the Nasdaq Composite Index was up 0.81 of a point, or 0.03 percent, at 2,291.75. Higher-than-expected sales at coffee chain Starbucks Corp. kept the Nasdaq positive, while U.S. department stores and clothing retailers posted surprisingly strong September sales as falling gasoline prices and cool weather spurred spending on fall fashions. Shoppers flocked to stores run by Limited Brands Inc., J.C. Penney Co. Inc., Target Corp. and Nordstrom Inc. in a key transition month as retailers wrapped up back-to-school sales and prepared for the vital holiday shopping season. Those stocks had recently run higher, though, and on Thursday, they were mostly lower. Nordstrom's stock was down 1.1 percent at $44.70 on the New York Stock Exchange. Starbucks was the Nasdaq's top-weighted gainer after it reported same-store sales that topped analysts' estimates. Its shares rose 7 percent to $38.47 on Nasdaq. European stocks rallied on Thursday to their highest levels in over five years, boosted by takeover activity and expectations of strong earnings growth. The pan-European FTSEurofirst 300 index jumped 0.55 percent to end at 1,410.11, its strongest since July 2001 and pushing gains up to 10.5 percent so far this year. Among standout gainers, Anglo-Dutch steel company Corus surged 16 percent to end at a 6-1/2 year high after India's Tata Steel said it is considering a takeover bid. Other European steel shares also rose. The Nikkei jumped 366.78 points, or 2.3 percent, to 16,449.33, its highest close since May 12, bolstered by the Dow average's second straight record close on Wednesday. Canon Inc. was among the big gainers aided by news it may lift its projection for global digital camera shipments. U.S. government bond prices slipped after weekly initial jobless claims suggested the labor market may be more robust than thought. The benchmark 10-year U.S. Treasury note fell 14/32 in price to 102 for a yield of 4.62 percent, compared with 5.56 percent late on Wednesday. The euro slipped on Thursday after European Central Bank President Jean-Claude Trichet lowered expectations of another near-term rate hike, which would narrow the interest-rate spread between Europe and the United States. The euro was changing hands at $1.2688, down 0.21 percent from $1.2715 late Wednesday in New York. Against the yen, though, the dollar was off 0.06 percent at 117.71 yen from 117.78 yen in late U.S. trading on Wednesday. The pound was down 0.5 percent at $1.8771 after the Bank of England left rates steady at 4.75 percent as expected, disappointing some sterling bulls who were betting on the outside chance of a rate rise. Yields on 10-year euro zone bonds fell 15 basis points to 3.7 percent. Japanese government bonds erased earlier gains and fell on Thursday as investors sold bonds to buy shares, while a Bank of Japan official's remarks raised concerns about another rate increase. The benchmark 10-year JGB yield briefly rose to 1.735 percent, but eased back to 1.725 percent. U.S. crude oil futures rose after OPEC officials said the cartel will reduce production by 1 million barrels per day as soon as possible to lift slumping prices. Crude for November delivery rose 74 cents to $60.15 per barrel on the New York Mercantile Exchange. IPE Brent crude futures rose $1.01 to $60.23 in London on Thursday. COMEX December gold was up $7.80 at $574.50 an ounce, helped by short covering and a recovery in crude futures as traders bet on its inflation-hedge connection to energy prices.
